Among the cuts agreed to by lawmakers and President Obama in last Friday’s 11th-hour budget compromise to avert a budget shutdown is a dramatic reduction in the administration’s E-Government fund, which pays for open government websites such as Data.gov, the IT Dashboard and USASpending.gov.

The compromise figures, unveiled Tuesday by the House and Senate appropriations committees, include $8 million for the E-Government fund, which is administered by the General Services Administration. In contrast, Congress approved $34 million for the fund in 2010, and the administration had requested $35 million in 2011.

Federal Chief Information Officer Vivek Kundra said his office had only recently become aware of the cuts and was still assessing their impact.

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“Given the original request versus where we are, we are going to have to make some tough decisions around which systems are going to have to go offline versus what can be supported with an $8 million fund,” Kundra told a Senate hearing Tuesday. “This is very recent news, and we haven’t had a chance to sit down and actually prioritize systems.”

Complicating matters, Kundra told reporters after the hearing, is that the administration has statutory obligations to continue operating sites like USASpending.gov, and cannot simply shut them down at its own discretion.

As Federal News Radio first reported in late March, the Office of Management and Budget already was making contingency plans for a budget that would have forced it to begin taking some of the public websites offline as soon as late May. At that time, the House had passed a budget that included only $2 million in E-Government funding. Kundra came to Capitol Hill Tuesday to testify about the administration’s 25-point plan for reforming federal information technology acquisition, a process he told the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security had already yielded $3 billion in savings by turning around or restructuring faltering IT procurements. The process of adding transparency to those IT programs, he said, was key to the cost savings the administration had achieved so far.

“The first thing we wanted to do was to shine light,” he said. “And what we did when we launched the IT dashboard was we put up the picture of every agency CIO right next to the project they were responsible for. And I was public enemy number one for a couple weeks, but I think very quickly we realized that by shining light, all of a sudden we were exposing major issues around IT projects.” Kundra said the $3 billion in savings had come from the TechStat process the administration has begun using to evaluate IT contracts. The initial round focused on 26 high-value projects, and the next step is to scale the model up, he said.

“Already, 129 agency employees have been trained and 23 agencies have implemented the TechStat model to tap into the ingenuity of the American people,” he said. “We have open sourced the software code the IT Dashboard was built upon and the TechStat model. Thirty-eight states and multiple countries have reached out to express interest in adopting these models to improve accountability.”

Kundra said one of the things the administration has learned with the TechStat sessions is that the program managers running IT acquisition projects have tended to view them as simply IT systems, rather than project that will fundamentally change the way their agency operates. OMB has ended four large poorly performing projects, including a 12-year-old, $1 billion acquisition program for a new human resource management system at the Defense Department. But Kundra said the objective is not merely to kill programs, since there’s a business need behind those programs. He said the focus is on breaking large IT procurements into smaller, more realistic chunks. The process has looked at 11 large programs through that lens so far, he said.

“We said, instead of trying to boil the ocean, where people have bought into this fallacy that these enterprise resource planning systems are going to balance your books, they’re going to track your assets, they’re going to make you coffee, that you have to actually break these projects down into six-month increments,” he said. “If within six months you can’t prove that you’ve delivered something of value to your customers, you need to either halt that project or fundamentally rethink it or terminate it. With these large enterprise projects, people are spending years, sometimes decades implementing a project that’s not working.”

The administration also is saving money through data center consolidation, and will be able to close 100 data centers in 2011, Kundra said. He said the government’s data center consolidation task force was working to identify which centers would be shuttered.

“I think once we release the locations and the names, there’s going to be a lot of robust discussion back and forth,” Kundra said when asked if he expected agencies to push back against the list of closures.

The administration also will see savings from cloud migration, said David McClure, associate administrator of the office of citizen services and innovative technologies in GSA.

When GSA begins offering cloud email services under a blanket purchase agreement, it estimates it will save agencies as much as 44 percent over their current email costs. And McClure said GSA is already saving on costs by moving services from government servers to the cloud, as with USA.gov.

“By moving to a cloud environment, we were able to save an estimated $1.7 million in computing costs because we moved into a more agile environment,” McClure said. “And we’re able to provision changes to that system in hours instead of months, which means I can change the website and its features very quickly. And it allows me to use people in a different way. Rather than monitoring and running the infrastructure that we own, I can actually turn them over to more mission based and more value-added types of services.”

Kundra said the administration also is working to get better management of IT projects by growing a group of experts within government. The Office of Personnel Management announced plans to create an IT program manager career path in March.

The Government Accountability Office also released a study Tuesday on the administration’s IT reform efforts so far. It found there are billions more in savings to be had if OMB continues the oversight program it’s begun. GAO’s main criticism related to the quality of the data in the IT Dashboard. It found that the data did not always match up with internal agency cost and schedule performance figures.